New Home Sales Down, First Fall in 2014 1

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Tuesday, July 1st, 2014
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New home sales have dipped for the first time in 2014.

Sales were down 4.3 per cent in May, according to figures from the Housing Industry Association (HIA) on Monday.

Detached house sales fell by 2.2 per cent while multi-unit sales dropped 16.1 per cent.

Despite May’s dip, the outlook for new home sales remained healthy, given that this was the first decline for the year, said HIA chief economist Harley Dale.

“Further upward momentum may be a challenge and it is a distinct possibility that new home sales have peaked for the cycle,” Dr Dale said.

“The volume of new home sales, nevertheless, remains consistent with further growth in detached house building and the continuation of historically elevated levels of multi-unit construction in 2014/15.”

Dr Dale said construction of detached houses could grow faster in 2014/15 than in 2013/14, but this was being constrained by land supply shortages in Sydney and Perth.

“Inadequate land supply is one prominent example of supply side constraints preventing new home construction reaching its full potential, highlighting the need for a focus on housing policy reform,” he said.

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  1. Toby Pritchard

    Let's get this so called 'down' result in perspective. It was the fourth highest monthly result in more than three years and was 'down' only compared to the sky-high results of previous months.

    What this latest result really signals is an extremely high level of building activity.

    Likewise, building approval figures, which have been 'falling' in recent months. If you average out the first more months per year (seasonally adjusted), approvals for new dwelling construction are averaging more than 16,000 each month – more than 192,000 homes each year. Given that we have built more than 180,000 only once in the past 30 years, these are extremely strong numbers. Boom times are still here. Let's make the most of it.